Saturday, December 4

Christchurch Housing Remains Affordable Despite Rising Prices

After years of slow growth, property prices in Christchurch are suddenly rising and quickly catching up with the rest of the country.

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Photo: RNZ / Claire Eastham-Farrelly

Figures from Quotable Value showed Garden City outperformed all major centers in the three months to the end of September, with prices rising 7.7 percent.

So could Christchurch be about to lose its mantle as the most affordable city in the country?

Richard Tait ran a Harcourts in the town of Rolleston and said prices were rising faster than he had seen before.

“I saw one recently where a guy had paid $ 469,000 for it and I sold it in August of the following year for $ 775,000. So there’s a little change.”

And it seemed that the North Island buyers collected could be, at least in part, responsible for some of the tear sums paid for what were once affordable homes.

Tait said that some weeks as many as 30 percent of the buyers he saw were from out of town.

“[There is] I think there is a certain impossibility of entering the property market in Wellington, Auckland, Hamilton or Tauranga, which is why people come here. I have a guy in Tauranga who called me today because he had given up hope of buying in Tauranga and now he’s looking for a house here. “

And the growth wasn’t just one time, as QV showed that prices also rose 5.8 percent in the three months through August.

The eastern suburb of Linwood had long been a place where early home buyers could get value for money.

RNZ took to the streets to see if that was still the case and ran to John Billingsley.

“My son just paid $ 415,000 for a house that was worth $ 330,000 [in December]. It is now worth $ 525,000. And I know many who are also heading south. A friend of mine is going to live in Timaru, another in Waimate and they are buying mansions so they are selling their houses here. “

Economist Tony Alexander said there was no question that out-of-town investors were now drawn to Christchurch, where prices were still only half what they were in Auckland and Wellington, and where they could achieve a lot of rental returns. top.

“And I think especially to the young people who find property unaffordable in the other major cities realizing that they can move to Christchurch and still have a good job, good income, be on the corporate career ladder and buy more affordable property “.

But an economist at the council-led Christchurch NZ development agency, Jorge Chang Urrea, said the city was not ready to completely give up its title as the most affordable place in the country just yet.

“For example, in the greater Christchurch and Canterbury area, about 18 per cent of people’s income goes to their mortgages and in the Auckland region it is almost 40 per cent. Income counts too, Christchurch remains the most affordable city. “

New homes were still being built in Christchurch, with buys up 67 percent from last year, meaning supply will soon catch up with demand and remove some of the heat from the market, he said.

Tony Alexander also believed that prices were not going to get completely out of control, mainly due to the impact of rising interest rates between now and the middle of next year.

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